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Time of India
2 days ago
- Automotive
- Time of India
Japan's exports drop as US tariffs hit automobiles, pressure set to intensify
June exports down 0.5% yr/yr vs forecast rise of 0.5% Japan's exports fell for a second straight month as sweeping U.S. tariffs took a toll on the country's manufacturers, with its fragile economy exposed to greater risks from the global trade war in coming months. Japan failed to clinch a deal with the U.S. before the July 9 expiration of the temporary pause on the country-specific tariffs after it focused on eliminating the existing sectoral 25% tariffs on automobiles, a mainstay of the export-reliant economy. Washington now plans to impose tariffs of 25% on Japanese imports, unless a trade deal is struck by August 1. "The tariff impact is likely to intensify in coming months, when the tariff rate is finalised and Japanese companies begin to fully pass on costs to consumers in the U.S., which would hamper competitiveness of Japanese products there," Daiwa Institute of Research economist Koki Akimoto said. Exports from the world's fourth-largest economy dropped 0.5% in June year-on-year in value terms, compared with a median market forecast for a 0.5% increase and a 1.7% decrease in May, the first decline in eight months. Exports to the United States tumbled 11.4% in June from a year earlier, the largest monthly percentage decline since February 2021, dragged down by a 26.7% plunge in automobiles, a 15.5% fall in auto components and a 40.9% plunge in pharmaceuticals. But the volume of automobile shipments rose 3.4%, indicating Japanese automakers are cutting prices on exported cars and absorbing tariff costs to stay competitive. "Japanese automakers have so far kept production levels by sacrificing margins, so the tariff impact on their production activities has been limited," Koya Miyamae, senior economist at SMBC Nikko Securities , said. But Daiwa's Akimoto said Japanese companies would be forced to raise prices eventually, as trade negotiations drag on and the yen stays relatively strong. Japan exported 21 trillion yen worth of goods to the United States last year, with automobiles representing roughly 28% of the total. Japan's trade surplus with the U.S. in June fell 22.9% to 669 billion yen ($4.51 billion). Exports to China were down 4.7%, the data showed. Total imports grew 0.2% in June from a year earlier, compared with market forecasts for a 1.6% drop. As a result, the trade balance stood at a surplus of 153.1 billion yen ($1.03 billion), compared with a forecast for a surplus of 353.9 billion yen. U.S. tariffs are adding to pressure on the Japanese economy which is struggling due to lacklustre domestic consumption. Japan's economy shrank in the first quarter as rising living costs hurt demand. Prolonged uncertainties over the impact of the tariffs and the course of trade negotiations will likely force the Bank of Japan to keep focusing on downside risks to the economy and to put rate hikes on hold for the time being, analysts say.
Time of India
4 days ago
- Business
- Time of India
SMFG and SBI join hands to target Japan's growing affluent class with $69 billion plan
Sumitomo Mitsui Financial Group Inc. and SBI Holdings Inc. plan to jointly offer wealth management services to affluent clients in Japan, aiming to manage ¥10 trillion ($69 billion) in assets over the next five years. The new joint venture will be funded by SMFG and two of its group companies — Sumitomo Mitsui Banking Corp. and SMBC Nikko Securities Inc. — along with SBI Holdings Inc. and its main domestic brokerage, SBI Securities Co., according to a statement issued on Monday. 'The widespread adoption of mobile financial services is expected to accelerate the growth of the digital affluent segment, creating a significant market opportunity,' said Toru Nakashima, SMFG's chief executive officer, at a press conference. He said the joint venture aims to become profitable in three years and is targeting pre-tax profits of ¥10 billion within five years. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Why Seniors Are Snapping Up This TV Box, We Explain! Techno Mag Learn More Undo The move highlights the growing potential of the wealth management sector in Japan. According to forecasts by the Daiwa Institute of Research, the proportion of Japanese households with financial assets of ¥50 million ($347,000) is expected to increase to 6.1% by the end of the fiscal year starting April 2035, up from 5% in fiscal 2019. The total amount of assets held by such households is also projected to rise by around a third to ¥953 trillion by the end of fiscal 2035, compared with the end of fiscal 2024. Policymakers in Japan have been encouraging individual investors to move more of their savings into riskier assets like equities, as part of broader efforts to reduce reliance on government spending. These efforts come at a time when Japan's ageing population is putting pressure on the social security system. Live Events Despite these pushes, Japanese households remained cautious. As of the end of March last year, about 51% of their financial assets were still held in bank accounts, showing a conservative investment culture. This contrasts with roughly 12% in the US and 34% in the euro zone, based on data compiled by the Daiwa Institute of Research. Other firms in Japan's financial sector have launched similar ventures. Rakuten Securities Inc., which has a capital and business alliance with Mizuho Securities Co., set up a joint venture that began operations in April last year. That venture is targeting households with financial assets of ¥20 million or more. It is focusing on individuals in their 40s and 50s who are already Rakuten Securities customers and have a need for face-to-face financial services.
Japan Today
09-07-2025
- Business
- Japan Today
Trump's 25% tariff to reduce Japan's GDP by 0.8% in 2025: think tank
U.S. President Donald Trump's 25 percent "reciprocal" tariff on imports from Japan, if imposed, is projected to reduce the Asian nation's gross domestic product by 0.8 percent in 2025, according to a private-sector estimate. Over the longer term through 2029, the newly set levy that takes effect on Aug. 1 is estimated to cut Japan's GDP by 1.9 percent, the Daiwa Institute of Research said. Together with other tariffs already imposed by Trump, including the 27.5 percent duty on automobiles, the U.S. trade policy could dent Japan's economy by 1.3 percent in 2025 and 3.7 percent in 2029, the think tank said. Koki Akimoto, an economist at the think tank, said the country-specific tariff, if implemented, will likely have a broad impact on the Japanese economy, ranging from lower production levels for exports and reduced capital investment. Under the so-called reciprocal tariffs, Trump's administration has imposed a baseline duty of 10 percent covering imports from almost all countries in the world, aside from sector-based levies. On Monday, Trump set a new rate of 25 percent for Japan, slightly higher than 24 percent initially announced, while leaving the door open for further negotiations. Takahide Kiuchi, executive economist at the Nomura Research Institute, projected, in total, Trump's tariffs could reduce Japan's GDP by 0.85 percent in around a year. "If they are applied, the Japanese economy is likely to gradually fall into a recession by next year with a probability of (that occurring at) more than 50 percent," he said. © KYODO
The Mainichi
09-07-2025
- Business
- The Mainichi
Trump's 25% tariff to reduce Japan's GDP by 0.8% in 2025: think tank
TOKYO (Kyodo) -- U.S. President Donald Trump's 25 percent "reciprocal" tariff on imports from Japan, if imposed, is projected to reduce the Asian nation's gross domestic product by 0.8 percent in 2025, according to a private-sector estimate. Over the longer term through 2029, the newly set levy that takes effect on Aug. 1 is estimated to cut Japan's GDP by 1.9 percent, the Daiwa Institute of Research said. Together with other tariffs already imposed by Trump, including the 27.5 percent duty on automobiles, the U.S. trade policy could dent Japan's economy by 1.3 percent in 2025 and 3.7 percent in 2029, the think tank said. Koki Akimoto, an economist at the think tank, said the country-specific tariff, if implemented, will likely have a broad impact on the Japanese economy, ranging from lower production levels for exports and reduced capital investment. Under the so-called reciprocal tariffs, Trump's administration has imposed a baseline duty of 10 percent covering imports from almost all countries in the world, aside from sector-based levies. On Monday, Trump set a new rate of 25 percent for Japan, slightly higher than 24 percent initially announced, while leaving the door open for further negotiations. Takahide Kiuchi, executive economist at the Nomura Research Institute, projected, in total, Trump's tariffs could reduce Japan's GDP by 0.85 percent in around a year. "If they are applied, the Japanese economy is likely to gradually fall into a recession by next year with a probability of (that occurring at) more than 50 percent," he said.
Gulf Today
18-06-2025
- Automotive
- Gulf Today
Japan's exports post first drop in 8 months as tariffs hit auto firms
Japan's exports fell in May for the first time in eight months as big automakers like Toyota were hit by sweeping US tariffs, and the failure of Tokyo to clinch a trade deal this week will likely pile pressure on a fragile economy. Prime Minister Shigeru Ishiba said after the Group of Seven summit in Canada on Tuesday his country had not reached a comprehensive tariff agreement with Washington as some disagreements persisted between the two nations. Japan and the US 'explored the possibility of a deal until the last minute,' he added. Tokyo is scrambling to find ways to get Washington to exempt Japan's automakers from 25 per cent automobile industry-specific tariffs, which are hurting the country's manufacturing sector. Japan also faces a 24 per cent 'reciprocal' tariff rate starting on July 9 unless it can negotiate a deal with Washington. Japan's automobile sector accounted for about 28 per cent of the total 21 trillion yen ($145 billion) worth of goods the Asian country exported to the US last year. Its total exports in May dropped 1.7 per cent year-on-year by value to 8.1 trillion yen, government data showed, smaller than a median market forecast for a 3.8 per cent decrease, and following a 2 per cent rise in April. Exports to the US slumped 11.1 per cent last month from a year earlier, the largest monthly percentage decline since February 2021, dragged down by a 24.7 per cent plunge in automobiles and a 19 per cent fall in auto components, while a stronger yen also helped reduce the value of shipments. Exports to China were down 8.8 per cent. In terms of volume, however, US-bound automobile exports dipped just 3.9 per cent, indicating that the biggest Japanese exporters were absorbing the tariff costs. 'The value of automobile exports to the US fell, but their volume did not drop that much,' Daiwa Institute of Research economist Koki Akimoto said. 'This indicates Japanese automakers are effectively shouldering the tariff costs and not charging customers.' So far major Japanese automakers have refrained from price increases in the US to mitigate the tariff costs, except for Subaru and Mitsubishi Motors. 'They are buying time right now to see the course of Japan-US trade negotiations,' Akimoto said. The absence of price hikes could affect their profits, but their fiscal base is generally solid, he added. While Japanese stocks and the yen showed little reaction to the data, shares of car companies have come under pressure this year due to concern about the tariff impact. Automakers and other transport companies are the second-worst performer this year among the Tokyo market's 33 sector sub-indices, down almost 12 per cent. Only makers of precision equipment have fared worse. Toyota 7203.T, the world's top-selling automaker, has estimated that tariffs likely sliced 180 billion yen from its profit in April and May alone. Honda 7267.T has said it expects a 650 billion yen hit to its earnings this year from tariffs in the US and elsewhere. Reuters
